NEW DELHI  India and Pakistan failed Wednesday to resolve their differences over New Delhi's plan to build a dam that Pakistan fears will deprive its farmers of vital water supplies.

Work on the Tulbul Navigation project on Wular lake in the Indian-controlled portion of Kashmir was stopped in 1987 after Pakistan complained that the dam would disrupt the flow of water into the Jhelum River, which flows into Pakistan.

The project is one of eight issues that the nuclear-armed rivals have identified as irritants in their ongoing peace dialogue.

A joint statement issued at the end of two days of talks that ended Wednesday said the two sides would resume the discussions at another round of talks, a date for which would be fixed later.

"The talks were held in a cordial and constructive atmosphere. The two sides exchanged views on the project and reaffirmed their commitment to the Indus Waters Treaty of 1960," the statement said.

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Pakistan says the dam violates the Indus water-sharing pact between the two South Asian neighbors and has accused India of planning to store water and control how much would be allowed to flow to Pakistan. India denies the claim.

New Delhi says it wants to build the dam to make a shallow 20-kilometer (12-mile) stretch of the river navigable during the dry summer months and insists the treaty allows construction to ease navigation.

The talks resulted in a "better understanding" of the issues involved, said Water Secretary J. Hari Narayan, who led the Indian side.

"There has been tangible and good progress," Ashfaq Mahmood, who headed the Pakistani delegation, was quoted as saying by the Press Trust of India news agency.

But an Indian official, speaking on condition of anonymity, said although the talks had gone well, differences persisted, with both sides sticking to their original positions.

Pakistan and India have a history of bitter relations and have fought three wars since independence from Britain in 1947. Both claim the Himalayan region of Kashmir, which is divided between them.